Sector ETFs are a powerful tool for investors, offering a straightforward way to incorporate simple or sophisticated sector strategies with precision and transparency. And with $633B in AUM,1 it’s clear that equity sector ETFs are more than just a trend.
Powerful Portfolio Construction Tools
Sectors divide the economy into groups of companies that operate similar businesses or provide related products and services. Creating these segments enables in-depth analysis of market dynamics to see which parts of the economy are flourishing — or lagging — in order to find pockets of potential out performance.
Sector investments provide targeted exposure to these economic segments, giving you a wide variety of options to enhance the core of your equity portfolio and adapt to changing market cycles with agility and precision.
Using sector-based investment strategies can help you align and adjust your portfolios based on macroeconomic or thematic trends, like clean energy and declining interest rates, changing stock fundamentals, or shifts in technical indicators, like momentum.
Sector strategies can help you:
Read more about each of these investment cases in Four Reasons to Implement a Sector Strategy.
Ready to evaluate a sector or industry allocation? Use these resources to guide your decision making.
Sector & Industry Dashboard
Spotting Sector and Industry Trends
When you’re ready to implement a sector strategy, you can consider carving out a portion of your US equity exposure for sectors. Then, choose your sectors based on these types of analysis:
Investing in sector ETFs can be an efficient way to implement sophisticated strategies with precision and transparency.
ETFs can offer:
Select Sector SPDR® ETFs
SPDR Industry ETFs
State Street Global Advisors launched the world’s first suite of sector ETFs in 1998, and continues to expand on that heritage to help investors precisely meet their desired sector exposures.
1 Bloomberg Finance L.P., as of 03/31/2021
2Bloomberg Finance L.P., as of 03/31/2021. Based on total assets, 3-month average trading volume and 30-day average bid/ask spread.
3Bloomberg Finance L.P., as of 03/31/2021.
4Bloomberg Finance L.P., as of 03/31/2021.
Global Industry Classification Standard (GICS)
A financial-industry guide for classifying industries that is used by investors around the world. The GICS structure consists of 11 sectors, 24 industry groups, 68 industries and 157 sub-industries, and Standard & Poor’s (S&P) has categorized all major public companies into the GICS framework.
An investor or portfolio that invests assets into one or more sector of the economy. The Global Industry Classification Standard (GICS) consists of 11 sectors: Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care,Industrials, Information Technology, Materials, Real Estate, and Utilities.
This communication is not intended to be an investment recommendation or investment advice and should not be relied upon as such.
Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.
Actively managed ETFs do not seek to replicate the performance of a specified index. Because the SPDR SSGA Active Asset Allocation ETFs are actively managed, they are therefore subject to the risk that the investments selected by SSGA may cause the ETFs to underperform relative to their benchmarks or other funds with similar investment objectives.
Concentrated investments in a particular sector or industry tend to be more volatile than the overall market and increases risk that events negatively affecting such sectors or industries could reduce returns, potentially causing the value of the Fund’s shares to decrease.
Passively managed funds invest by sampling the Index, holding a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the Index.
Select Sector SPDR Funds bear a higher level of risk than more broadly diversified funds. All ETFs are subject to risk, including the possible loss of principal. Sector ETFs products are also subject to sector risk and nondiversification risk, which generally results in greater price fluctuations than the overall market.
Investing involves risk including the risk of loss of principal.